KY Judge Expedites Instant Racing Petition

A Kentucky judge is expediting the process by which various parties in the horse racing industry have requested a ruling on proposed administrative regulations involving Instant Racing.

In a July 26 ruling, Franklin Circuit Court Judge Thomas Wingate told the petitioners—the state’s eight racetracks, the Kentucky Horse Racing Commission, and the Kentucky Department of Revenue—to file briefs within 30 days. Thereafter a hearing would be scheduled before the court.

The KHRC unanimously approved regulations for Instant Racing machines—pari-mutuel in nature because the games are based on the results of historical races, the outcomes of which aren’t known to players—July 20. Though there has been a legal opinion stating wagering on historical races is permitted in Kentucky if the enabling regulations pass, the KHRC and other parties requested a declaratory judgment.

Officials at the time said the legal process could take six months, but Wingate opted to move it along for various reasons cited in his July 26 order, a copy of which was obtained by The Blood-Horse.

“The (Instant Racing) petition is unique in that all parties are designated as ‘petitioners,’ and there are no named ‘respondents,’ ” the ruling states. “On its face, such a non-adversarial petition would seem to lack the requisite justiciable controversy upon with our jurisdiction must be predicated.”

Wingate’s ruling notes the Kentucky Supreme Court has mandated courts “shouldn’t decide speculative rights or duties that may or may not arise in the future.” The judge, however, cited the “turbulent state of the horse industry” in Kentucky; the industry’s economic impact of $4 billion a year; and that “advance determination would eliminate or minimize the risk of wrong action or mistakes by any of the parties” as reasons to expedite the petition.

The Instant Racing regulations will be published Sept. 1, with a public hearing scheduled for Sept. 29.

The state Department of Revenue is party to the petition because it seeks a declaration on its determination that Instant Racing wagering can be taxed in the manner pari-mutuel wagering on live races and simulcasts are taxed in Kentucky. Under that scenario, the state tax on Instant Racing would be 1.5%-3.5%.

Should Instant Racing become reality in Kentucky, the tracks and horsemen’s groups would negotiate revenue splits that would come from pari-mutuel takeout. In Arkansas, the takeout for Instant Racing is about 8%, similar to that of a video lottery terminal or slot machine.